Sept. 26 (Bloomberg) -- Singapore’s industrial production
unexpectedly declined for the first time in four months in
August as companies reduced output of electronics, pushing the
local dollar to the weakest level in two weeks.

Manufacturing fell 2.2 percent from a year earlier after a
revised 2.5 percent gain in July, the Economic Development Board
said today. The median of 16 economists surveyed by Bloomberg
News was for a 1 percent increase.

The World Trade Organization last week cut its forecast for
commerce growth this year, and the International Monetary Fund
is preparing to reduce its global expansion estimates, Managing
Director Christine Lagarde signaled. Singapore trimmed its gross
domestic product outlook for 2012 after the economy contracted
in the three months through June from the previous quarter.

“There’s a risk that weak numbers will tip Singapore into
a technical recession,” Selena Ling, a Singapore-based
economist at Oversea-Chinese Banking Corp., said before the
report. “There are hopes that global stimulus implementation
will give a boost or stabilize output towards the year-end. But
it’s too early to see any strong recovery in the pipeline.”

The Singapore dollar fell 0.3 percent to S$1.2314 against
the U.S. currency as of 1:47 p.m. local time, paring its gain
this year to 5.3 percent.

The island’s central bank, which uses the exchange rate to
manage inflation, said in April it would allow faster local
dollar gains to damp price pressure. Economists including Irvin
Seah at DBS Group Holdings Ltd. have said they expect the
monetary authority to ease its policy stance next month and
adopt a more gradual pace of currency appreciation as growth
risks increase.

Output fell a seasonally adjusted 2.3 percent from the
previous month, when it slid a revised 8.7 percent.